When we are teenagers, we’re told by every adult that we should be planning and preparing for our future – and that’s terrifying for someone who is still asking permission to use the bathroom.
If you’re heading into your 20s, it’s likely everyone will be talking to you about your finances and future planning, and you should be paying attention. Whether you’ve been to college or not or you’re just moving into the next stage of your life, you will have responsibilities now.
All those years you wished for the freedom of adulthood, and it’s not until you get there that you realize that freedom still comes with restraints: mortgages and bills being two of those things!
You could have a job lined up already and the security that comes with that, but you need to look ahead, even if you’re not planning to retire for another fifty years or so.
When you plan correctly when you are young, you can get more time to explore and enjoy the things in which you plan to invest. If you pour money into oceanfront real estate, for example, that’s going to serve you well in the future and you are better able to enjoy a better, more carefree life.
The more you plan right now, the better off you will be and you can enjoy a future where you get a return on all the investments you make now. While it may sound like a boring thing to do, to invest and work hard now, it’ll pay off and you won’t still be working when you’re 70! So, with this in mind, here are five sound tips for investing your cash in your 20s.
1. Start Early
The best way to begin investing is to start early. It often feels like you have years to get your finances together, but really time is like sand: it’ll slip right through your fingers before you know it.
You need to consider investing either in property, stocks, your pension – no matter what you choose, you need to look at how much money you could save up with the investment beginning now. Even investing in something small through your 20s could make a difference to how much you have by the time you retire.
You build on this now and you will have a pretty retirement pot to sit on in the future! When you start early, the compound interest you gain is far more than if you leave it until later!
2. Make A Plan
You can book in to see a financial adviser at any time, and when you invest as part of a bigger financial plan, you’re going to make a point of having a roadmap through student loans, debts, and any bad spending habits, too.
An adviser is going to be able to take you through your current financial health and help you to make a projection for the health of your finances in the future, too. If you’re worried about paying things off, they’ll talk you through what you can do and help you to stop being spread thin with your finances.
3. It’s a Tool
It’ll benefit you to realize that money is a tool and you can use this tool to ensure that you have the lifestyle you want.
If you want the beachfront property, you can work toward that and use your money to get you there. Dividing the goals that you have into the short and long-term goals will help you to make the most of your financial independence as you get older.
4. Save Harder
The older you get, the more responsibilities you have to work with. You should want a bigger and better house, a newer car and the chance to travel, and to be able to do those things, you need to think about saving more and investing more as you go.
By the time you reach 40, you should be banking 20% of your income to ensure that you are able to live the life that you really want.
5. Ignore The “Insta Stars”
Celebrities have their hilltop houses and cars, and they have different plastic surgeries and design everything to keep up their look.
You do not need to try to keep up with that. It takes you spending money that you don’t have to live a life you don’t need and you don’t have to do that!
Having it all isn’t about splashing the cash, it’s about being smart with it! It takes time to build a future, but with these tips, you can do it!